Will the “Doc Fix” be the Lasting Solution Physicians Wanted?

Signed, sealed, delivered—the “doc fix” is a go. The $200 billion Medicare reform bill was signed into law by President Obama last month after passing through Congress by a landslide. In a statement, Obama called the bill “a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs.”

But is the “doc fix” the solution we physicians have been looking for?

What does the “doc fix” mean for doctors and patients?

Known as the “doc fix,” this nearly 300-page bill repealed the automatic 21% cut in Medicare payments, which were previously set on the sustainable growth rate (SGR) formula. These cuts have hung over physicians’ heads for years and were knocking on the door, threatening to go into effect once again. After 17 temporary aversions, legislators were prepared this time with a bill that finally did away with the automatic cuts.

Had these cuts gone into effect, both physicians and patients would have seen terrible losses. Doctors have already taken significant hits since Obamacare went into effect. With these cuts, we would have faced still more deductions to our income for Medicare patients (already low-paying patients). If doctors saw Medicare payments drop even further, you can bet that more doctors would have dropped Medicare patients in droves.

But the “Doc Fix” passed. The cuts didn’t go into effect. It was a big bipartisan victory and the outcome all us physicians were pushing for. So that fixed things, right?

Actually, the reality is that doctors may actually make less money in the long run. This bill could be nothing more than another short-term fix to an ongoing problem.

Why do I say that? Well, Medicare’s chief actuary reported that these payments will need to be reassessed again as early as 2025. What’s more, by 2048, Medicare payments will be even less under the Doc fix than they would be under the current SGR. By 2087, they’ll be one-third of the current rate. Does that sound like the type of long-term fix doctors have been hoping for?

Where Politics Get Involved

Good or bad in the long term, this Medicare reform package was a long time coming. Every year for nearly two decades, lawmakers have had to revisit this issue. Obama called it an “annual manufactured crisis.” For far too long legislators have passed temporary fixes to an impending disaster for physicians and Medicare patients, dancing around healthcare reform that should have been dealt with a long time ago.

Politics surrounded this bill, as it so often does with healthcare reform, but in this case bipartisan cooperation stood out as a hallmark of the legislative process. The bill passed both the House and Senate with an overwhelming majority. We all know the two sides of the government don’t always find a lot to agree on, but as a physician, I am relieved to see legislators put aside their differences on this — even if it’s a short-term solution.

But this bill wasn’t just about pleasing us doctors. It was about taking care of Americans on Medicare, and this has its own politics. The elderly make up a significant voting bloc. Letting Medicare payment cuts for physicians go into effect would leave many of our elderly without healthcare. A legislator who didn’t support a bill to keep Medicare patients with their healthcare providers could take a huge hit the next campaign season. No legislator wants to be “that guy” on the wrong side of the Medicare battle.

Then, of course, there’s the issue of how to pay for this kind of reform. The bill will cost about $214 billion over 10 years. Spending cuts will offset some of those costs, but only about $73 billion. According to the Congressional Budget Office, the bill will add $141 billion to the federal deficit. To cover some of these costs, beneficiaries who make more than $133,000 a year will pay higher premiums. This caused some concern among legislators but was not enough to kill the bill.

Other Changes to Expect

Besides preventing the Medicare payment cuts for doctors, this bill will bring other changes. The bill mandates reforms to the Medicare payment system, which promotes quality of care over quantity of care. In other words, it follows the trend toward value-based care. Running more tests has been an incentive for doctors as they face threats of lawsuits, so this mandate now puts more of an onus on doctors to assume and manage risk. We have to be prepared for these kinds of changes in our practices.

As part of this new payment system, doctors will receive a 0.5% increase in payments in each of the next five transition years. The new metrics will reward healthcare providers with a 5% payment bonus if alternative payment models make up a significant portion of their revenue.

On the one hand, this bill has prevented the Medicare system from going haywire in the short term. On the other, doctors could be getting the short end of the stick even more so than they are now. I’m not sure if I’d call this bill a true “doc fix,” but it could be the start of a conversation about Medicare and doctors’ payments that has been a long time coming.